Commercial Inspections

As the home inspection industry continues to develop, with more individuals entering this great profession, many inspectors are investigating different service offerings for revenue and company growth. Another consideration for multi-inspector firms is employee retention—how to show a progression and advancement within the firm. 

For those who want to expand services to generate more revenue, diversify business when home inspections are slow, and improve employee retention through greater advancement opportunities, expanding into commercial inspections can be an excellent option. 

What is a Commercial Inspection?

A commercial inspection can cover a number of building types that are larger in scale than your typical single or multi-family home. These may include office towers, retail stores, industrial and manufacturing facilities, and apartment buildings. 

For those who are more experienced in commercial inspections, your service offering may also include institutional structures like churches, schools, etc. An inspection of commercial buildings will include all of the items that are generally covered in a home inspection, plus a few more. For example, commercial buildings also have more involved fire and life safety systems (sprinklers, fire alarms, etc.) and vertical transportation systems (elevators and escalators).

Commercial inspections do not follow home inspection standards. Most commercial inspection companies follow the ASTM E2018-24 Standard for Property Condition Assessments (PCAs). A PCA is much more hands-off than most home inspectors think. No removing cover panels, no testing of equipment, reviewing systems and units on a sampling basis, and no commenting on environmental issues or process-related equipment, are just some of the main differences.

Commercial Inspection Benefits

At a very high level, here are some of the benefits of diversifying into commercial inspections:

Commercial inspections build on your preexisting home inspection skill set; you already have a lot of the knowledge and tools to get started in this field.

They can generate up to 80% more revenue than home inspections in an equivalent amount of time.

A company providing home and commercial inspections may garner more respect than a company providing only home inspections; you look more impressive to prospective clients interested in both types of properties.

There is no emotion involved in a commercial inspection that is typical of a home inspection with homebuyers and sellers. It’s all business. This significantly reduces your liability.

Scheduling is typically business hours, as that’s when commercial buildings are operating.

Many commercial building owners have portfolios of properties, which makes it easy to potentially garner more business if you perform a job well.

A Different Mindset

After having taught thousands of home inspectors over the past 25 years how to transition into commercial inspections, I have found one of the biggest hurdles is the mindset. Every course attendee can learn the technical details, but some seem to have difficulty leaving the home inspection mentality behind. The commercial client is (thankfully) different from a homebuyer. The requirements for the reports are different.

Admittedly, home inspectors (myself included) are very detail-oriented. We want to catch every little deficiency on a home inspection to avoid callbacks. That is not the case with commercial inspections. The commercial client is bottom line–oriented. They need to know the costs for major repairs and replacements, as they are making a business decision. Commercial clients often need to send the report to their lender for approval as well. Accordingly, the client and the lender don’t need to know maintenance issues, minor deficiencies, etc.

The concept of a true visual inspection that does not include testing is also difficult for some to grasp. “How do we know if the rooftop unit is working if we don’t test it?,” is a question often asked. Our goal is not to identify every minor repair necessary; the important information is the age of the equipment, how long it typically lasts, and yes, its overall visual condition. Someone buying a building would much rather know if the rooftop units are five or 25 years old, not whether they are functioning properly. I would further suggest specialists would be required for every system, on every inspection, if we were to test systems. This is not what is required. The ASTM Standard for Property Condition Assessments specifically states that the site review is typically conducted by one person with well-rounded knowledge of pertinent building systems.

The Team Approach

A concern for home inspectors entering into commercial inspections is the sheer size and scope of what’s involved. They often get overwhelmed by the thought of inspecting an entire commercial building by themselves.

Fortunately, we get help with larger buildings or buildings with complex systems. The approach used under those conditions should be that of a team. You may have other inspectors in your company or partner with other inspectors in your area to perform the job. You can also subcontract other specialists who may be more familiar with certain aspects of the building, such as the fire and life safety systems, elevators, electrical, and mechanical systems. 

Your job may be to look at the components you are comfortable with; you may subcontract the less familiar systems to more specialized consultants. In essence you are partially the site assessor and partially a project manager, making sure your specialists are able to get through their systems. Of course, you will add a markup to the services of these consultants when you bill your client.

The Right Training

While commercial inspection is based on many of the same technical principles as home inspection, having knowledge of the differences is essential in order to succeed in this arena. 

That’s why it’s important to ensure you have the right training. You will need a complete commercial inspection training course that can prepare you for the world of commercial inspections. The training should not only include the technical side but must also prepare you for understanding the business side. Concepts like quoting fees, proposal writing, risk management, even how to come up with cost estimates for repairs, are all vital to your success.

The good news is that you already have a good understanding of many of the principles. The concepts for everything you learned in home inspection are simply magnified to a larger scale in commercial inspections, in addition to some of the new concepts previously mentioned. 

The ASHI School Commercial Training Course

The ASHI School has partnered with Carson Dunlop to provide a comprehensive three-day commercial training course.

As part of this training, you will learn how to get into the commercial inspection business. We will cover everything from business practices to technical inspection, with special emphasis on the “the TEAM approach” to commercial inspections. You will learn where and when a consultant is required and how to find and work with consultants.

Additionally, you will receive a commercial inspection textbook and a wealth of information, including sample inspection reports, consultants’ reports, proposals and information on quoting inspections, report writing, costing and relevant business issues.

Many past attendees have commented how this commercial training course has strengthened their understanding of structures and systems and increased their confidence with their home inspections.

The next commercial inspection class will take place November 12 through 14. The class is approved for 22 ASHI Continuing Education Credits (not state-approved CE credits). ASHI Members receive $400 off of the commercial class when adding their ASHI number to the registration form. Learn more or register at homeinspector.org/event/commercial-inspection-class-2/. 

In Summary

Commercial inspections can generate up to 40% more revenue than residential inspections for the same time spent.

Another great benefit is the flexibility enjoyed by commercial inspectors. All buildings need to be inspected for various reasons, including pre-sale, pre-purchase, pre-lease, post-lease, financing, etc. So, there is a wider range of opportunities available for commercial inspectors. 

If you offer both residential and commercial inspection services, you will have greater diversity in your business and be better capable of keeping busy during market fluctuations.

Commercial inspections also allow inspectors to work without the emotions of a home buyer, which can be stressful for everyone involved.

Commercial inspectors also often work with specialists as part of a team approach to inspection. This approach allows greater opportunities for larger buildings, spreads out liability and allows additional revenue for marking up the specialists’ fees.

Richard Weldon has a degree in mechanical engineering and has been with Carson Dunlop since 1987. He received his professional engineer designation in 1989 and consulting engineer designation in 1995. In 1997 he became a partner at Carson Dunlop Weldon & Associates Ltd (CDW). CDW specializes in property condition assessments and energy audits of commercial properties and condominium reserve fund studies. CDW also provides commercial inspection training to public and private groups across North America.